Understanding volts and amps
W = V x A
If you recall your high school physics class, you should know that watts, volts, and amps are all measurements of electricity. Voltage refers to its strength, amperage is the volume of current, and together they determine the wattage, or total power. So within a computer PSU, the number of volts and amps for each internal power supply, called “rails,” are multiplied to determine how many watts they produce, and the grand total of all the wattages added together is generally what gets slapped on the box. As I mentioned before, this doesn’t always represent what the power supply is actually capable of producing. Let’s take a look at this cheapo Sunbeam 580W PSU, which you can find on Newegg for $20:

As you can see, it combines 30 amps on the +3.3V rail, 36A on the +5V rail, and 25A on the +12V rail to come up with its total power. 99 watts plus 180 watts plus 300 watts is 579 watts, which is how they come up with that 580W total. That seems like enough power for a lot of mid- to low-end gaming rigs, doesn’t it? (If you’re wondering, the +5Vsb refers to the stand-by rail; it’s always on while the PSU is plugged in and allows the computer to be turned on by pressing a button connected to the motherboard. The -5V and -12V rails are basically obsolete.)
But notice that the label doesn’t specify whether this is peak or continuous power, nor does it tell us what operating temperatures that rating applies to. The omission of that information likely indicates that the manufacturer is being deceptive, so we should assume that that is peak power at room temperature, i.e. the best case scenario that is not at all indicative of real-world usage. Not that you should ever get anywhere near a $20 power supply anyway… Reviews of this particular unit show it struggles to output more than half of that 580W!
Here’s another label, from the Antec TruePower Trio 430W I used in one of my old computers:

It’s a bit more complicated with the multiple +12V rails (we’ll talk about those in a minute), but you can still multiply the volts and amps to figure out the total wattage. 75 plus 72.6 plus 192 plus 192 plus 192 equals… *gasp* 723.6 watts! If that’s the total wattage, why isn’t that listed here and on the box? Because that is the “theoretical” output, and since Antec doesn’t lie to you, they list the actual, continuous output of 430W, a full 300 watts less.
Part of this large discrepancy is due to the footnote you see underneath where it says “Total output power;” even though there are three +12V rails with limits of 16 amps each, the maximum load for all +12V current is 32A, only 2/3 of what we calculated before. When we account for this, we come up with about 530 watts, which sounds about right for a “peak output” figure compared to the total output they advertise. Maybe you could draw up to 500W out of this unit, but that wouldn’t be very good for its health.